Intel reports strong Q3 results

SANTA CLARA, USA: Intel Corp. reported third-quarter revenue of $9.4 billion. The company reported operating income of $2.6 billion, net income of $1.9 billion and earnings per share (EPS) of 33 cents.

"Intel's strong third-quarter results underscore that computing is essential to people's lives, proving the importance of technology innovation in leading an economic recovery," said Paul Otellini, Intel president and CEO.

"This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward. As we look ahead, Intel's game-changing 32nm process technology will usher in another wave of innovation from new, powerful Intel Xeon server platforms to high-performance Intel Core processors to low-power Intel Atom processors."

Highlights
* Third-quarter revenue $9.4 billion, strongest second-to-third-quarter growth in over 30 years.
* Gross margin 58 percent, up 7 points sequentially.
* Operating income $2.6 billion.
* Net income $1.9 billion.
* EPS 33 cents.

Key Financial Information
* Record microprocessor and chipset units.
* Mobility Group revenue up 19 percent, Digital Enterprise Group revenue up 14 percent, and Intel Atom microprocessor and chipset revenue up 15 percent to $415 million, all sequentially.
* Gross margin was 57.6 percent, higher than the company’s expectation.
* The average selling price (ASP) for microprocessors was slightly down sequentially.
Inventories were down $315 million sequentially.
* Spending (R&D plus MG&A) was $2.75 billion, consistent with the company’s expectation.
* Restructuring and asset impairment charges were $63 million, higher than the company’s expectation.
* The net loss from equity investments and interest and other was $47 million, better than the company’s expectation.
* The effective tax rate was 27 percent, versus the company’s expectation of 23 percent.

Business Outlook
Intel’s Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after Oct. 12.

Q4 2009
Revenue: $10.1 billion, plus or minus $400 million.
Gross margin percentage: 62 percent, plus or minus 3 percentage points.
Spending (R&D plus MG&A): Approximately $2.9 billion.
Restructuring and asset impairment charges: Approximately $40 million.
Amortization of acquisition-related intangibles and costs: Approximately $20 million.
Impact of equity investments and interest and other: Approximately zero.
Tax rate: Approximately 26 percent.
Depreciation: Approximately $1.2 billion.
Full Year Capital spending: Expected to be $4.5 billion plus or minus $100 million, down from the prior expectation of $4.7 billion plus or minus $200 million.